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Auto Loan Calculator
Find your exact monthly car payment, total interest cost, and a full month-by-month amortization table. Add down payment, trade-in value and sales tax for a precise result. Export to PDF or Excel in one click.
How the Auto Loan Formula Works
Monthly car payments are calculated using standard loan amortization: the same formula used by banks and credit unions worldwide.
Where M is the monthly payment, P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments.
Example
A $30,000 loan at 6% APR over 60 months: r = 0.06/12 = 0.005. Monthly payment = 30,000 × [0.005 × (1.005)⁶⁰] / [(1.005)⁶⁰ − 1] = $579.98/month. Total interest = $4,798.80.
Tips to Reduce the Cost of Your Auto Loan
- Put more down: Every dollar of down payment reduces the principal, which reduces both monthly payments and total interest.
- Choose a shorter term: A 48-month loan costs significantly less in total interest than a 72-month loan on the same vehicle, even though payments are higher each month.
- Negotiate the vehicle price first: The dealer's financing offer is separate from the sticker price. Get the price settled before talking about monthly payments.
- Shop rates before the dealership: Get pre-approved by your bank or a credit union. A pre-approval gives you a benchmark to compare dealer financing against.
- Avoid rolling in extras: Extended warranties and GAP insurance added to the loan principal accumulate interest over the full loan term.
Frequently Asked Questions
What is a good APR for a car loan ?
Average new car loan rates in the US vary by credit score. Borrowers with excellent credit (720+) typically qualify for rates under 6–7% APR. Used car loans are generally 1–3 percentage points higher. Always compare your dealer's offer to your bank or credit union.
Should I put 20% down on a car?
Putting 20% down is a commonly recommended rule of thumb. A larger down payment reduces your principal, lowers monthly payments, reduces total interest, and helps you avoid being immediately "underwater" on the loan (owing more than the car is worth).
Is a 72-month or 84-month car loan a bad idea?
Longer terms lower monthly payments but significantly increase total interest paid. They also increase the risk of being upside-down on the loan for years. Many financial advisors recommend keeping car loan terms to 60 months or less.
What does the amortization table show?
Each row of the amortization table shows how your fixed monthly payment splits between reducing the loan balance (principal) and paying the lender's cost of lending you money (interest). Early payments go mostly to interest; later payments go mostly to principal.
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Disclaimer: Results are for informational purposes only. Contact a qualified lender for official loan terms and rates.
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FCALCULATOR Finance Team
Last reviewed
Standard amortization formula. Results validated against major banking amortization schedules. Reviewed annually.